Geographic access markets and investments

- We study the adoption of access regimes based on the degree of infrastructure competition.
- We compare differentiated access prices with a uniform price regime.
- Geographically differentiated access prices improve welfare and incentivize investment.
- When access in areas with infrastructure competition is deregulated, welfare may decrease.
- Deregulation in access leads to multiple inefficient equilibria on investment level.

We analyze the adoption of access regimes that differ according to the prevailing degree of infrastructure competition in different geographical areas of a country. Our results show that, compared to a uniform access price, geographically differentiated access prices improve welfare and incentivize investment. However, when access provision in areas with infrastructure competition is deregulated, welfare might decrease, because multiple inefficient equilibria at the wholesale level emerge, with either too little or too much investment.